Motorcyclists feeling victimised by insurance companies

Motorcyclists are fuming at insurance companies, complaining of a raw deal as they see their insurance cover costs hiked up by over 50 per cent or more.

Apart from some bike owners finding it hard to insure their machines, for reasons of age, for instance, most feel that insurance companies are making a fast profit from the biking community.

Motorcyclists in the process of renewing their policies are finding they are having to meet steeply higher charges.

"From a Lm28 cover for third party costs, I have been asked to pay Lm43, which is up by more than 50 per cent," the owner of a 750cc custom bike said.

The same kind of cover for the same-capacity bike stood at Lm55 at another insurer, according to another motorcyclist. And at another it was just Lm30.

"How can insurance companies charge such different rates," the biker, who preferred not to be named, wondered. "Why do the authorities allow this?

"Surely there must be something wrong in a system which allows such fluctuations in charges for the same service? Insurance cover is compulsory, not a matter of choice. There should be controls."

He can prepare himself for extra costs next year. Insurance companies are in the business to make money and only last month the annual general meeting of Middle Sea Insurance was told that there had been negative results from the indigenous motor vehicle and liability classes of business. Corrective measures were being introduced gradually to address the motor and liability classes, the meeting was told.

The reason likely to be given next year is that pillion riders are to be insured.

Philip Bezzina, secretary of the Island Motor Cycle Club said that insurance firms were classifying motorcycles according to their capacity and not according to brake horse power, as insurance firms do overseas.

Motorcyclists would get a fairer deal if bikes were classified according to their brake horse power, he argued.

Club president Michael Debono described insurance premiums for motorcyclists as 'daylight robbery'.

"Comprehensive insurance cover for a motorcycle could be as high as Lm1,000," he said - if an insurer were found to provide such cover.

"Motorcycle owners are fed up with this situation. Owners of the bigger, more expensive bikes pay every care for their machines, which they treat as their treasures. The way they ride them and the manner they keep them should not be penalised with higher premiums," he said. "It should be the other way round. Careful riders, and careful drivers, should be rewarded. They should not be made to pay for the carelessness of others."

Marisa Attard, from the Malta Financial Services Authority, the regulator for financial services, said that the Motor Vehicles (Third Party Risks) Ordinance Cap. 104 was amended last December, making it compulsory on motorcycle insurance policies to provide insurance cover for pillion riders.

"The law is, however, not in force yet and no bike owner is obliged to take out insurance for pillion riders. But cover for pillion riders is an EU requirement which means that by May 1, next year, when Malta joins the EU, the law has to be in force and implemented," Dr Attard said.

Robert Baldacchino, general manager at Laferla Insurance, said it was up to an insurance firm to decide whether or not to offer pillion rider cover.

The recent rise in insurance premiums for motorcycles was the result of increases recorded in international markets and was based on the instructions passed on to insurance companies by their principals.

Where pillion riders are insured, the insurer has to provide a fund to meet claims that could shoot up.

It is a different thing for an insurance company to offer third party cover to make good for the damage to, say, a car, or an electricity pole, but a different game when it comes to insuring pillion riders.

"Let us imagine, for a moment, that a pillion rider who is permanently injured is a 25-year-old professional and who, because of the injuries sustained, will not be able to work any more.

"In such a case the claim to the insurance company would not only be to pay hospital and surgical expenses but also the potential income lost by that person till retirement.

"Such claims can run into astronomical figures," Mr Baldacchino argued.

Regarding the high premiums for comprehensive insurance cover referred to by Mr Debono, Mr Baldacchino pointed out that repairs on the more expensive bikes can be quite substantial.

"Even if one of these bikes just topples over, the damage can lead to quite hefty repair bills," Mr Baldacchino said.

It was up to individual insurance companies to decide what type of insurance cover to offer.

National Statistics Office figures show there were 3,276 traffic accidents during the first quarter of this year, 31 fewer than in the same quarter last year.

But the statistics do not distinguish between accidents involving motorcycles and those involving cars, so it is not possible to determine whether there are proportionately more accidents involving motorcycles, than accidents involving cars.

At the end of March there were 196,388 private cars and 13,149 motorcycles on the road. Between January and March, 121 motorcycles and 2,058 private cars were scrapped.